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Interview

Ambitious Growth Strategy for TAI and Stakeholders, Anticipating Revenue of $1.9 Billion in 2017

In an in-depth interview, TAI President & CEO –Temel Kotil, Ph. D. talks with Defence Turkey Magazine about TAI’s long list of successful projects, experience and vision for the future

Defence Turkey: Dear Mr. Kotil, first of all we would like to thank you for your time. In the last quarter of 2016 you were appointed as the President & CEO of Turkish Aerospace Industries, Inc. (TAI) of which you were a board member. As a professional of this sector, what are your assessments regarding the Turkish Defense and Aerospace Industry since the time of your assignment?

Before I provide my assessment I would like to underline a certain point. The publication of magazines focusing on defense began in the 1970s. The reason that I became an aircraft engineer in 1979 is due to these magazines. The emergence of these sectoral magazines is a result of the establishment of Turkish Aircraft Industries Corporation (TUSAS) by the Deputy Prime Minister of that time Mr. Necmettin Erbakan in 1973. The establishment of TAI as per the related law and the boom of Turkish industry along with the subsequent publication of such magazines through sponsorships are the initial motivators of the youth at that time, to select careers in aviation.

 We signed an agreement with the Aeronautics Faculty of Istanbul Technical University last week. The students of Istanbul Technical University will be designing a two-seater aircraft within 24 months with our support. This aircraft will be certified by the European Aviation Safety Agency (EASA), manufactured and will make its maiden flight within two years. I wanted to share this good news with you as well.

I was coached as an aircraft engineer, in other words as an aviator, and was educated within the expertise and scholarship of TAI. At that time, within the scope of the off-set liabilities of the F-16 program, approximately 400 students were sent abroad for educational purposes. I was one of the students sent abroad with this scholarship. The prime purpose as part of this program was to gain insight into aircraft design and then we would return home following the completion of our PhD studies and aircraft design programs. Yet, the course of events did not evolve as anticipated. I returned to Turkey in 1991 and started my academic career at the Istanbul Technical University. After working there, I lived in America for a while and I was appointed as the President & CEO of Turkish Airlines.

Throughout my 13 year career at Turkish Airlines, I recognized that the postponement of departure time of more than 15 minutes was considered a delay. In such a work environment, one must operate efficiently and act quickly. Since my assignment at TAI as the CEO, I have been exerting great effort toward conducting related activities here as well. “15 minutes” is a significant amount of time in Commercial Aviation, but it does not make sense in Military Aviation and I would like to revise this mindset as I find it quite odd. Punctuality is the soul of business and in order to thrive we need to attach importance to this point, the same amount of importance given by any airline. I encourage my staff to this end as well.

Defence Turkey: It seems that the total sales turnover and export figures of the Turkish Defense Industry made no progress past two years. Within this context, at the speech you gave at the Ostim Defense and Aviation Cluster’s General Assembly, you clarified TAI’s consolidated budget for 2017 as $1.9 billion. How will TAI be shaped in the short run in 2017 with this new term that was launched with your appointment?

Our turnover was $1.3 billion with the contribution of our affiliate companies last year and we anticipated reaching $1.9 billion with stakeholders in 2017. Our budget for 2016 was achieved simply as TAI (without our affiliates) at $1 billion, and we drew up our budget estimate for 2017 as $1.6 billion. We are discussing an increase of 67 percent. TAI’s Aerostructure Group conducts sales over $ 500 million to giant international companies such as Lockheed Martin, Boeing and Airbus. TAI has acquired this revenue merely through the aero structural parts we manufactured for the leaders of the aviation industry. If we provided such services to these companies with our own indigenous designs, we would be able to acquire ten times the aforementioned amount and we would now be discussing of a figure of $ 5 billion.

The increase in the budget estimate that we identified for 2017 is due to the acceleration of the serial production of our indigenous products. The budget of the Korean Aerospace Industry (KAI) and Israel Aerospace Industry (IAI) companies remains in the band of $ 3 billion.  Yet it is still not enough for our targets.  The Italian Leonardo Group had recorded turnover at around $12 billion. When I initiated this assignment, I committed to our Minister of National Defense that we will be able to achieve a turnover figure of $10 billion in next decade.  So we have to reach such figures and therefore we should possess our own indigenous products. Otherwise we won’t be able achieve the aforementioned turnover figures, by merely working with companies such as Boeing and Airbus. We are pursuing the accomplishment of our indigenous products in line with this objective.

Defence Turkey: Dear Mr. Kotil, as you also mentioned above, within next decade TAI positioned to be able to create a value of $10 billion.  What type of a vision comprising organic and inorganic growth do you intend to put forth to reach such an achievement? 

Yes, we have this goal for the next decade. Surely, it is not easy to reach such figures and the path to achievement is through the penetration of overseas markets. While maintaining our activities to this end, we do not focus on thriving by the acquisition of our local companies, which provide services to us, but by accessing markets abroad and in cooperation with these companies, creating added value. Therefore, with this inorganic growth understanding, we do not aspire to purchase any local companies, but rather, we will grow by means of acquisition of companies abroad. We share these views with our Ministry of National Defense and Undersecretariat for Defense Industries (SSM). We recently purchased a German-based company in Germany. We will be expanding this company further by exerting more effort into it. We aim to transform this company, which conducts manufacturing, into engineering. I would also like to point out that TAI should not be limited to Ankara, it should strengthen its existence in Istanbul as well. Our manufacturing activities will always remain fundamentally in Ankara as we have key facilities in Ankara. But we will have facilities providing manufacturing services to our company in various provinces of Turkey as well. Istanbul is becoming our engineering center. I would like to express that the most prominent staff of our company are the technicians and our engineers. I remain at the end of this chain. Therefore, we strive to create a happy and peaceful environment for our technicians and engineers.

Upon the decision that we adopted at our last board meeting, we secured a 2000 m2 indoor area at Istanbul Teknopark. It will be immediately occupied in July 2017. At that time, our 250 engineers will be launching their activities at Istanbul Teknopark in order to support our team there. Consequently, the center and production activities of TAI will be in Ankara. You will witness TAI with sub-industry extended around Turkey and producing parts and components when required all over the world. With our intellectual and engineering activities, we will be active in Istanbul and all around Turkey and even in various cities in the world. 

Defence Turkey: Turkey’s turnover in defense and aerospace industries is approximately at the level of 1%; TAI is manufacturing indigenous parts for the OEMs in this scope but it seems that this production is not reflected in the export figures at the desired level. What type of strategies should Turkey develop in order to enhance this share and render our indigenous products into a global exportable brand?

Our most valuable promotion is through the importance given to the defense and aerospace industry by our statesmen especially by our Dear President. We recently hosted the general manager of a European company which is ten times bigger than our company and he said to us as we were sending him off: “We envy you; we don’t receive the interest shown to TAI and its executives in our country”. This reminds us that we attract the attention of all segments of our society from our statesmen to our citizens and youth and we are truly aware of this point. Anything given such an amount of interest would surely grow. Our community claims to have their focus on the defense industry; the youth of Turkey and from abroad are eager to work with us. We see the enthusiasm in their eyes and sense it closely. There really is great interest towards this sector in this country. Turkey will mark an era with technicians, design engineers and skilled engineers in the near future. We invite them to come not only to Ankara but also to Istanbul, Gaziantep and Kayseri as well as our geographical reach expands. We do not need grand facilities to accomplish these achievements. For instance, we will be able to assign the design of a project to our office in Eskişehir, and when a greater more complex design is required, we will appoint the project to our office in Istanbul.

 One of the best advantages of our country is its affordability. I would like to underscore that in America, Europe, the Far East and even in China, the human labor cost associated with advanced technology is far too expensive compared to our country.

 Now, if we get back to the actual question, how will we ever achieve this? We can exemplify the case as follows. As you know, Turkey is a worldwide recognized and notable brand in the textile sector. We ask, how did our country achieve this? Turkey has been a contract manufacturer over the years. The technicians, weavers and experts always earned regular wages. If Turkey did not conduct contract manufacturing in that period and preferred to work as a brand instead, the workers would again earn the same wages. In contract manufacturing, the employees earn the same salaries but the bosses cannot make money the products are not branded. With the experience and know-how accumulated over the years, Turkey became a critical power in this sector, manufacturing prices have fallen, and today our brands have emerged. If Turkey is still a brand in textiles at this moment with the work force shifting to India, Indonesia, China, it is due to the strength of the brands. 

As TAI, we design aircrafts through high technology but concurrently we have to minimize production costs in order to become competitive in the global market. The turnover of Boeing and Airbus companies is nearly 50 times that of our turnover and this surely offers diverse opportunities along the way. It may sound quite assertive but currently if we assume whole work packages ordered by Boeing and Airbus, we would become the world’s greatest defense company. Ultimately, we could not accomplish them all but we are able to take charge in more projects by reducing our costs. For instance, in the meetings we recently had with Airbus and Boeing companies, we made an offer to the parties that we would be further reducing our prices, stating that we would reduce the costs by 30 percent. We have not yet determined where to cut our costs, but we will cut costs down to the bottom. You will see TAI as the world’s most affordable low-cost manufacturing company. This is one of the ways to be ambitious, we will compete with ourselves now.  

Defence Turkey: Dear Mr. Kotil, activities were conducted recently for the public offering of TAI but the process could not be finalized. Will there be an acceleration in this process related to the public offering of TAI now with your assignment? What are your assessments on this issue?

It would not be appropriate for me to comment on this issue as an executive as the subject is related to the shareholders. In the existing structure as a private company, the Turkish Armed Forces Foundation holds a 55% share of the company, around 45% of our shares belong to the Undersecretariat for Defense Industries, and a minor amount of our shares is held by the Turkish Aviation Association. We have the status of a private company since our major shareholder is the Turkish Armed Forces Foundation; therefore, there are no obstacles in managing this company as a private company. If our company is privatized, like Turkish Airlines, there will be no changes in our daily routine work. It would not be proper to make any further comments.

Defence Turkey: Dear Mr. Kotil, you discussed the latest developments in respect to the acquisition of a German-based company, in line with the inorganic growth strategy and added that you will be purchasing new companies within the scope of this strategy. Will the company acquisition be conducted with western companies or are the innovative companies located in the East on your agenda?

 All business and social activities of Turkey are conducted with Western as well as Eastern countries are close cooperation with the western countries. Turkey has to cooperate with both western and eastern countries as well as the Nordic countries. Especially Ukraine and Russia, there are critical technologies.

Defence Turkey: Will there be any surprises in 2017 as part of your inorganic growth strategy?

 As I mentioned previously, we are expanding the structure in Germany. We will be employing engineers in that company focused on manufacturing and then extending it. My agenda will be focusing particularly on this issue in the upcoming weeks. Technology companies need to put their roots down and spread into the world.  We are integrating the systems and 60% - 70% of these are composed of components; we are integrating these systems to rotating and fixed-wing platforms or to the unmanned air vehicles. We are willing to manufacture at home but the process will take time, therefore we need to procure them from abroad. Thus, we have to manufacture this component abroad and that’s why it’s wise to own a company there. Therefore, we will exist in United States, France and Britain as well as China and in Korea. But as Eastern countries are still in the development stage and as their approach is based on competition, the perception of interoperability is currently lacking.  Western countries are more content, and the gates are opened more easily. So, we will be regularly located in the West.

Defence Turkey: Dear Mr. Kotil, Turkey was involved in Multi-National programs such as F-35 JSF and A400M and TAI has been assuming important responsibilities as part of these programs, having a significant business share. Yet, if we take an overall look we observe that the share is below the sufficient level. How should Turkey become more effective and secure major roles in these joint programs? Could new joint programs be developed in the upcoming period through the new models to be established under the leadership of TAI? Do you have such a dream?

 We recently participated in the Defense and Security Exhibition in Malaysia and held important business meetings there. Various Official delegations were intently interested in the ANKA Medium Altitude Long Endurance (MALE) UAV, New Generation Basic Trainer “ Hürkuş”  and “T129 ATAK” Attack and Tactical Reconnaissance Helicopter. During the course of the exhibition, I offered a suggestion to a few companies to build a single-aisle aircraft with a 200 seat capacity. There is a great opportunity here. Boeing sold 10,000 737 series aircrafts. A year ago, I received the 10 thousandth aircraft myself as the President of Turkish Airlines; but in terms of design we are speaking of an aircraft of the 1960s. Similarly, the design of Airbus’ A320 series aircraft belongs to 1970s. Therefore, there is a requirement for a newly designed aircraft. Boeing is planning to design a new aircraft and we made our proposal to the company to this end. There is a request for a single-aisle passenger aircraft, so TAI will be seeking a new opportunity here. We have a limited budget and power to achieve this within existing circumstances, but if the conditions allow, we would like to be involved in the process through a partnership model with the approval of our board.

We have an essential business share within the scope of A400M project. Almost 300-400 of our engineers are working for this program. Our team working in this program acquired significant technological knowledge. When you are involved in these projects, you get the chance to team up with skilled staff and countries that own technology such as Italy, England, France, Spain and Germany. Working in these types of joint programs also abolish prejudice. I would like to underline that this program is important in respect to the fact that it gathers skills and know-how from Europe and our country, and promotes the adoption of the interoperability approach.

Defence Turkey: Dear Mr. Kotil, you assumed a very critical role in the TF-X Indigenous Fighter Jet Development Program which is considered to be one of the most important programs of Turkey. Design activities are being conducted over a model created by the joint design groups with the BAE Systems which was selected as the Foreign Cooperation Partner. We also see the establishment of a close cooperation on behalf of the governments of both companies as part of this program. Could you please elaborate the current status and the business models identified for the upcoming period within the framework of the established project model?

 We refer to this program as Turkish Fighter (TF) and exclude the X at the end of its title. We committed in the course of the signature ceremony, attended by the British Prime Minister and Turkish Prime Minister, to achieve the best fighter jet in the world. And how will we accomplish this? 

We have signed a quadrennial contract with BAE Systems, and following this period we will be signing an additional contract extending 8 years. Our current agenda comprises this 4-year period. In accordance with this contract, all the architectural design of the aircraft will be completed during the Preliminary Design Review (PDR) phase. Here, throughout this 4 year long process which will be conducted over paper, we are willing to accomplish the outstanding PDR process on global scale. There are no obstacles as BAE Systems will be dispatching additional staff. We also have skilled staff in certain areas. Yet we lack the staff experienced in the development stages of a supersonic fighter jet. But there are a lot of qualified human resources that have gained experience in the design of Fighter Jets on the global scale. We are prepared to hire the skilled staff, construct a new plant for them and the new building is to be occupied in the 3rd quarter of 2018, a facility where 2700 engineers will be working. Moreover, we allocated a facility at our premises for those currently working at ODTÜ Teknokent and will be relocating them to our premises at the end of April. Therefore, we are able to design the optimal Fighter and can accomplish the unrivalled PDR throughout quadrennial program schedule as well as the preliminary design. If we fulfil this commitment, Germany, Spain, England and France will require novel Fighter Jets, apart from just Italy. If we achieve the optimal design within quadrennial phase, we can find a partner for this program as well. In this way, Turkey would not have to single-handedly fund the entire financial budget. We would be able to achieve the development of an outstanding Fighter Jet on a global scale with partners through shared know-how.

Defence Turkey: Mr. Kotil, it is stated that in order to achieve a large-scaled and complicated program such as TF-X,  a leader team devoted to the program as well as executives, engineers, technicians and staff would be required. We know that you are preparing for an intensive talent search both domestically and through the modality of reverse brain drain from abroad in this respect. What type of a preparations have been made to this end? Could you please share your related strategies with our magazine?

 It is known as the Gypsy team and consist of around 100-200 skilled staff that take charge exclusively in the major Fighter Programs on a global scale. They migrate to other programs upon completion of existing projects. We aspire to be involved with this team as the F-35 JSF program is over. There are no existing major programs in western countries as well as South Korea that are exclusively striving to develop its 4.5 – 5th new generation fighter jet program. I would like to point out that there are a few Turkish Engineers among these names. If we have the ear of this team in the PDR phase, this team would join us. We are speaking of a core staff composed of all nations who were involved in the development stages of all the magnificent Fighter Jets of the world such as F-35 JSF and F-22 Raptor. On the other hand, there are many experts abroad assigned at Boeing and Airbus and they get in contact with us to be involved in these giant program. America, China and Russia possess indigenous fighter jets all over the world. It is a comprehensive and challenging program, but we are aware of how to manage it. My primary duty,  and that of TAI, is to set up an effective eco-system and to enable the world’s best designers to join us. Money is not everything; these skilled staff indulge in designing and I believe wholeheartedly that we could achieve it.

Defence Turkey: By launching the reverse brain drain method in the last period, TAI has performed bilateral discussions with various experts competent in their branches of expertise abroad. It is not easy to persuade individuals who are working abroad with grand resources and facilities to come to Turkey, and that’s why we could not achieve the desired level in that period. Specific to TF-X, which modality should be adopted that could attract and persuade these qualified individuals to work in this program while also keeping sustainability in mind?

 From the start, we all must rely on what we do as TAI. We have to reflect this mentality throughout our entire operations. Turkish Airlines is peaking with the support of our prime minister and president as well as the ownership of Turkish Airlines by the community. We have the same process here as well. I would like to exemplify this; a successful youth colleague agreed our proposal even though the salary was below the figure he earned in America as he is eager to be involved in this program. Thus, we do not have to offer the same conditions to those who will be working with us. TAI must prove to itself and to the world, with this motto: “We are becoming the greatest platform manufacturer  in the world”.

Defence Turkey: Dear Mr. Kotil, you were the head of a very prominent brand, Turkish Airlines, in commercial aviation for a long time. You are very well aware of the customers’ criteria and now you are on the other side of the table. In this perspective, what will be the responsibilities of all the shareholders in the eco-system within this development program in order to render the Turkish Regional Aircraft Project a brand on an international scale and to create demand? Can we claim that TAI’s efficiency in this program will increase more with your appointment and your experience in Commercial Aviation?

TAI or another companies, have to manage programs through their own capital to ensure sustainable development. It is not correct to execute major projects through state-funded resources. There is an opportunity in respect to the passenger aircraft. It seems that designs are ageing for Boeing and Airbus aircraft. The Japanese built an aircraft named MRJ which also comprises new engine technology. Nowadays, the single-aisle aircrafts of Boeing and Airbus enable up to 14% fuel savings with high-tech engine technologies. 

The Japanese took advantage of an opportunity with the newly designed airplane. But the aforesaid airplane is very small, currently I am not sure of the actual sales figures but I do not think that very many of these airplanes were sold.  Even a composite unique airplane with a new generation engine cannot be sold on a global scale. Therefore, Turkey must build an aircraft which could be sold on the market. Could TAI develop and manufacture a single-aisle aircraft with the capacity of 150-200 seat, unaided? There’s no capacity to do that now. Even if we achieve it, we may confront a problem during certification and marketing activities. Market conditions are evolving with each passing day as the aircraft designs of Boeing and Airbus are very old and these companies will have to re-design future aircrafts in the near future. In this case, we will team up with a strong partner and develop and manufacture an aircraft or we will be involved in the start-up design phase developed by either Boeing or Airbus and get a high percentage of the work-share from these programs. The Regional Aircraft Project is vital for Turkey, we have not been assigned such a task yet but we will fulfil it in the event we are appointed. 

The most important point I want to underline here is that a company must stand on its own assets and produce the cheapest prices with the best technicians and engineers. There is nothing that we can’t achieve with time and optimal human resources. 

Defence Turkey: The structural integration activities are being conducted in an accelerated manner within the scope of the Hürkuş-B serial production program. Additionally, recently the LUMTAS missile integrated Armed Hürkuş-C has accomplished its launching demonstration in Konya with the participation of our Minister of National Defense and Land Forces Commander. In which direction are the negotiations proceeding for the serial production agreement and technical requirements between the two parties?

The Request for Proposal document was issued on 7 April 2017 by the Undersecretariat for Defense Industries (SSM) within the scope of the Next Generation Light Attack/Armed Reconnaissance Aircraft Hürkuş procurement project and we continue our activities for submitting our bid.  The Hürkuş-C contract is expected to be signed in May 2017. As part of this project, the aim is to procure a total of 32 aircrafts consisting of 8 initial configuration, 12 full configuration and 12 optional aircrafts.

Defence Turkey: In regard to the export activities of the T129 ATAK helicopters, it seems that various countries are closely interested, Pakistan being in the first place. Can we expect new developments in the foreign sales of this platform, which has proven itself in the operational field, in the upcoming period?

The accomplishment of especially the initial export to the attack helicopter market is quite a long process. The self-actualization of the platform, its logistic support and the feedback from the existing user bear great importance within this context. Since its selection by the Turkish Armed Forces, there is a high amount of interest in the T129 ATAK Helicopter from overseas markets as well. The amount of this interest increased especially after the completion of deliveries and the self-actualization of the delivered helicopters in theatre. 

As you also mentioned, following the recent high performance of our helicopters in high altitude and high temperature conditions, the gulf countries and Asian countries, Pakistan in particular have shown great interest. 

As you know, last summer, the T129 ATAK Helicopter was intensely and severely tested in the challenging temperature and geographical conditions of Pakistan. Our helicopter did not embarrass us and conducted all types of challenging tasks under extreme temperatures over 50 degrees Celsius. It filled us with pride with the high performance it demonstrated even in the Himalayan Mountains and passed all the tests successfully. Our negotiations with the public authorities of Pakistan on all levels positively continue to this end.

Defence Turkey: Mr. Kotil, the deliveries will be launched this year within the scope of ANKA-S program. On the other hand, the Request for Proposal considering the “Akıncı” UAV program with a payload capacity of over 1 ton is planned to be issued in the second half of this year. Could you please inform us on the preparations you have been conducting to this end?

We prepared a very comprehensive reply to the Request for Information document issued by the SSM regarding the same project last year. Our important suggestions in respect to the cost-benefit considering the technical specifications within the Request for Proposal that was issued by the SSM. With the knowledge we acquired through the ANKA projects, we do not foresee any risks concerning the establishment of a technical solution that can fulfil all specifications stipulated by the Request for Information document. Regarding the engine, we continue to work on alternative suppliers and engine types by taking the export license restrictions into consideration. We have a high level of readiness for the management of a project of such a scale with the multiple subcontractors and supplier chains. With the publication of the RFP and the clarification of the technical specifications, we will be preparing our bid that is comprised of the competitive technical solution that completely fulfils the specifications and submitting it to the SSM.

Defence Turkey: One of the most important programs you have been conducting as TAI is the Indigenous Light Helicopter Program. Could you please inform us about the latest status of this program? How many prototypes are planned to be manufactured as part of the program? What are your comments on the request that will be created by a helicopter of this class at home and abroad and on the added value it would bring to our country? 

Within the scope of the Indigenous Light Helicopter Development Program, we are currently conducting the critical Preliminary Design Review activities. As part of the program for the development and production of two T625 Helicopter prototypes, in addition to the hull design and developed avionic systems, the design and production of the systems bearing critical importance such as transmission, rotor, dynamic parts and landing gear are completely conducted through the utilization of domestic facilities and capabilities. 

As also underlined by our Minister of National Defense Mr.Fikri Işık during his visit to TAI, we endeavor to accomplish the maiden flight of the T625 Helicopter on 6 September 2018 at 06:00 at the premises of TAI.

With the help of these helicopters developed to fulfill the requirements of military and civil users, numerous tasks such as personnel transportation, search and rescue operations, border security operations, medical transportation, VIP transportation, forestry, firefighting and offshore transportation could be executed. Thanks to its superior performance and multi-role functions, we are expected to export it to international markets as well as cater to the requirements of our procurement authorities.

Regarding the maiden flight of the T625 Helicopter, we will be expecting orders from the Turkish Authorities under the leadership of the Undersecretariat for Defense Industries for mass production. In the upcoming period, when the civil and military user requirements are considered, we envision that the requirement for helicopters in the 6 ton category will be around 250 - 300.

Defence Turkey: GÖKTÜRK-1 satellite was launched successfully in a ceremony attended by our President in December 2016. It is expected that the acceptance tests will be completed and it will become fully operational soon. Mr. Kotil, what should TAI do to reach a structure that develops, manufactures and tests its own satellites, taking into account the added value of products used in the field of space, especially when evaluating new satellites. What are the expectations and predictions in this context when we evaluate the strengths and weaknesses?

First of all, I would like to express that the experience, know-how and infrastructure of TAI are capable of successfully carrying out all satellite projects that our country requires for military and civilian purposes and satellite projects of foreign countries having the potential for business cooperation meeting international space standards.

TAI, with its completed indigenous projects such as Göktürk-2, Göktürk-3 (Phase-I) has attained significant experience, capabilities and infrastructures. Our company has the capacity to produce the satellites that our country will need in the future and has demonstrated this with the success of projects that it has conducted. The consolidation of our experience with these satellites and with new satellite projects is also an important part of our agenda. Today, we are aiming to develop critical satellite equipment or software, which are not produced domestically, with local resources so that these gains can be further promoted. To this end, comprehensive studies are being carried out in our country, also with the involvement of TAI, in order to indigenize the critical subsystems.

TAI, acting as the Main Contractor and System Integrator in satellite projects, has the experience, infrastructure and personnel that can lead our country’s space industry and we are willing to fulfill all these tasks. We develop ourselves every day to be one of the important players in this field.

When evaluated for the export of space products, TAI has the accumulation of capabilities to also achieve in the space arena, just as it has obtained its international position in aerospace/aviation. In this sense, we consider that Turkey has important export potential in space systems which have very high added value for Turkey and as TAI, with this responsibility, many activities aimed at achieving significant export success in the field of our country’s space systems are simultaneously carried out at home and abroad.

Defence Turkey: As part of the Utility Helicopter Program, the first prototype has recently been dispatched to Turkey for the avionic integration activities. What is your readiness condition and how are the investments for the overall project proceeding in this context? Could you please inform us about the program schedule?

As the main contractor, we will be conducting the production of all parts of T70 helicopters such as the cabin, cockpit, tail cone, horizontal and vertical tail, main and tail rotary palls, final configuration operations, tests and integrated logistical support within the scope of the project; Aselsan will execute the development and integration of the basic avionics and the development of the helicopter cockpit with Sikorsky (IMAS); TEI will assume the production of T700 engine; Alp Aviation will be in charge of manufacturing and installation of the landing gear, dynamic parts and production of the detailed parts of the gearbox. 

Within this context, during the next era, we will be manufacturing 109 T70 Helicopters at our facilities. This is a significant figure and crucial achievement. We aim to accomplish the initial delivery as part of the program in 2021.

 Defence Turkey: The first aircraft has recently been dispatch to Italy for the certification tests within the scope of the Meltem-3 program. Moreover, the prototype phase has been finalized as part of the C-130  “Erciyes” Program and the serial modernization of the aircrafts has been launched. Could you please inform us on the current status of both programs and their delivery schedules? 

Within the framework of the Meltem-3 Program in which operates as the subcontractor of the Leonardo Company, the modification of the first aircraft has been completed at our facilities and the aircraft has been dispatch to Italy. The certification tests under the responsibility of Leonardo are on-going in Italy. The modification activities of the other 5 aircrafts continue in Ankara under our responsibility. The SSM is striving to finalize negotiations with Leonardo for the delivery program. 

In respect the C-130 Erciyes program, the modification of the first serial aircraft has been completed at our facilities following the two prototypes and it has been prepared for acceptance. The second serial aircraft will be at the acceptance phase in advance of summer. The modernization of three serial aircrafts continues at the Kayseri 2nd Air Logistics Command and they are planned to be delivered prior to year’s end